Google sued for $2.3 bln by 32 media groups

Google has recently been hit with a lawsuit of $2.3 billion by 32 media groups, including the German multinational mass media company Axel Springer and the Norway-based digital consumer brand Schibsted. According to the 2.1 billion euro lawsuit, the media companies have suffered losses because of Google's digital advertising practices.

The move by the group - which includes publishers in Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, Hungary, Luxembourg, the Netherlands, Norway, Poland, Spain and Sweden - comes as antitrust regulators also crack down on Google's ad tech business. Shares of the Mountain View, California-based company fell more than 2%.

"The media companies involved have incurred losses due to a less competitive market, which is a direct result of Google's misconduct," a statement issued by their lawyers Geradin Partners and Stek said.

"Without Google's abuse of its dominant position, the media companies would have received significantly higher revenues from advertising and paid lower fees for ad tech services. Crucially, these funds could have been reinvested into strengthening the European media landscape," the lawyers said.

They cited the French competition authority's 220-million-euro fine against Google on its ad tech business in 2021 as well as the European Commission's charges last year to buttress their group claim.

"If there is follow through to the regulatory scrutiny, Google may need to curtail its practices and provide more consistent, predictable pricing to its advertising customers," D.A. Davidson & Co analyst Gil Luria said.

The lawsuit comes at a time when Google's core advertising business is facing an existential threat from the shift to generative AI chat, Luria added.

In a statement, a spokesperson for Google said the company opposes the lawsuit, adding that it is "speculative and opportunistic". "Google works constructively with publishers across Europe. ... (Our advertising tools) adapt and evolve in partnership with those same publishers."